Why are high-tech manufacturers so focused on improving customer service today?

June 12, 2014
QUESTION: Why are high-tech manufacturers so focused on improving customer service today?


Why are high-tech manufacturers so focused on improving customer service today?


Andrea Ivory Senior Marketing Manager UPS

High-tech companies are shifting their supply chain principles to make customer centricity a number one priority, even surpassing product quality. According to the 2013 Change in the (Supply) Chain survey, when asked about their current supply chain focus, only 39% of executives consider their organizations to be customer-centric today.

Increasing globalization, competition coming from new regions and the rising influence of the end consumer, have all put strains on the high-tech supply chain. Executives view customer service as a means of differentiation from competitors, with 72% citing it as a driver in their efforts to create a customer-centric supply chain, and a similar proportion citing it as a means to improve sales and profitability.

Why is lead-time reduction becoming more important for high-tech firms?

In today’s connected world, the customer experience is more important than ever. The leaders of high-tech companies recognize the growing influence of the end consumer and their desire to receive products faster. There are many ways to deliver a better customer experience, and in our most recent survey reducing lead times was the most often planned method to improve customer service.

How can companies reduce customer lead times?

There are several ways companies can reduce lead times. Near-shoring to move production closer to demand is on the rise, with roughly one out of four high-tech firms embracing this strategy to better serve their customers.

Another way companies can reduce lead times is to work with UPS to implement a network of field stocking locations (FSL), which offer same and next day transportation services to meet the needs of customers. Ultimately, a FSL network will move inventory closer to the end customer and reduce lead time for high-tech companies.

Products such as UPS Worldwide Express Freight, which has a 1 day time in transit from select parts of China to the US, have high usage in the high-tech industry and can assist customers with lead time reduction.

Many high-tech firms say they intend to improve customer service through better planning. Can you please explain what this means on a practical level?

In the Change in the (Supply) Chain survey, 68% of high tech company leaders said they are improving their planning capabilities to make their supply chains provide better customer service. These activities include demand planning, inventory planning and production planning, as well as product lifecycle management.

In the end, all of this planning is aimed at delivering a better customer experience. That means preventing product stock outs, late shipments, damaged shipments and having the flexibility to re-route orders when necessary.

What are some of the challenges to improving these planning capabilities, particularly product lifecycle management?

For product lifecycle management, a critical element of the product lifecycle is the global product launch. When considering product launch challenges, there are two areas where proactive planning can assist with a successful launch: collaboration and coordination.
Collaborating with original equipment manufacturers and other value-added service providers, and the local coordination of day-specific final delivery in various markets, were the top two challenges of respondents to our survey.